The idea of component based software systems has a long tradition in the field of software engineering. Component markets have been an integral part of this idea. However, such markets can be found only rarely in practice, i.e. markets for software components still need to evolve. The aim of this paper is to discuss the drivers and inhibitors to the development of a software component industry which we consider as an important prerequisite for software component markets. Based on an earlier path model from a different author we present a model that is targeted at but not limited to the software industry and that has the degree of modularity of an industry as it most important dependent variable. The degree of modularity as assumed by the model is influenced mainly by four factors, i.e. domain complexity, customer influence, pressure towards a modular design and standards. The factors and the dimensions of the factor are discussed in this paper. The model is discussed only theoretical. However, we plan to operationalize the factors and to test the model empirically in a later stage.